How Allergan went from a tiny Los Angeles eye care company to one of the biggest takeover targets of 2015
Allergan was founded in 1948 by pharmacist Gavin S. Herbert, shown below on the left with Dr. Parmis Khatibi, a specialist at the University of California, Irvine Medical Center in 2014.
Along with chemist Stanley Bly, Herbert created the company's first drug, an anti-allergy nose drop that used the antihistamine neoantergan, in Los Angeles. They marketed the drug under the name Allergan.
The eye drops launched Allergan into the eye care field.
Allergan Pharmaceuticals Inc. officially became a company in 1950. The company focused on eye products before becoming public in 1970.
Allergan briefly merged with drug company SmithKline Beckman in 1980. In 1989, it separated from SKB when it was acquired by SmithKline Beecham (precursors to today's pharma giant GlaxoSmithKline).
Around that time, the FDA approved a drug to treat lazy eye known as botulinum toxin type A, or Botox. Allergan acquired the company that made the new drug.
In the 1990s, ophthalmologist Jean Carruthers was treating people with a tight eyelid condition with Botox injections when she realized her patients' wrinkles were going away as well. After publishing her findings, dermatologists began to pick up on the off-label use of Botox.
Box grew so popular that at one point in 1997, the US had run out of its supply, inciting panic for those who used the treatment monthly to reduce wrinkles.
It took until 2002 for cosmetic Botox to officially get the FDA's stamp of approval. In the second quarter of 2015, sales of Botox amounted to a whopping $632 million, almost $200 million more than Pfizer's second-quarter sales of Viagra.
By the mid-2010s, Allergan was involved in making treatments that fell under the umbrellas of eye care, "medical aesthetics" (breast implants, dermal fillers, and Botox for wrinkles), neuroscience (Botox is used in a different dose for people with overactive bladders and those with chronic headaches) and obesity.
Then, in 2014, Allergan looked like the perfect takeover target for Valeant, whose CEO, Michael Pearson (shown below) wanted to turn it into a cash-generating machine.
It was then that Actavis, a drug company that specializes in generic drugs and over-the-counter products, scooped up Allergan for a neat $66 billion. Here's a photo of Actavis CEO Brenton Saunders and Allergan CEO David Pyott on the floor of the New York Stock Exchange.
Actavis CEO Brent Saunders 44, saw the deal through its close in March 2015, at which point he became the CEO of Allergan Plc - now a Dublin-based global pharmaceutical company.
In July, Allergan agreed to sell its generic drug business for $40.5 billion to Teva Pharmaceuticals. The move put Allergan in a spot to develop more branded drugs in areas like eye care, aesthetics, gastroenterology (dealing with the stomach and intestines), and women's health. Here's a shot of one of Teva's buildings in Jerusalem, Israel.
As of November 2015, Allergan is in talks to get acquired by Pfizer. The acquisition would be the biggest merger of 2015.
If it comes to pass, the deal would allow Pfizer to incorporate in Ireland under Allergan, allowing the company to avoid the US's higher tax rate.
The talks between Allergan and Pfizer, disclosed under Ireland's takeover laws, officially began last week. It'll be a long time until Pfizer (whose CEO, Ian Read, is pictured below) and Allergan officially pair off, if it happens at all. But if the deal does close, Allergan and its best-selling Botox could help Pfizer become an even bigger global pharmaceutical company.
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